No.37 Ethnic Networks and Technical Knowledge Learning in Industrial Clusters

Using an enterprise-level dataset collected from 234 workshops located in the furniture cluster　of the city of　Arusha, Tanzania, this paper investigates the mechanisms of technical knowledge　exchange that take place in　clusters. A knowledge exchange link is defined as any two clustering　entrepreneurs who perform similar　manufacturing techniques in the production process. The　results show that the strength of the ethnic networks of　producers has positive effects on　acquisition of manufacturing techniques, particularly in skills such as wood-joining, which are　mainly influenced by a producer’s own skills rather than production facilities. Using dyadic data　analysis, this paper further finds that two producers from the same ethnic minority are more　likely to exhibit the same manufacturing techniques compared with two producers from the　same ethnic majority. These findings　suggest that ethnic networks facilitate knowledge　exchange in an industrial cluster, but that this positive externality of the ethnic network effect　only takes place in small-sized ethnic groups, and only to the extent that sophisticated facilities　are not essential in the knowledge learning processes.

Keywords: ethnic networks, knowledge learning, industrial cluster, Africa